Registration No. 200301030845 (633265-K) - 35 - 2. Basis of Preparation (Cont’d) (c) Significant accounting judgements, estimates and assumptions (Cont’d) Key sources of estimation uncertainty (Cont’d) Determination of transaction prices The Group is required to determine the transaction price in respect of each of its contracts with customers. In making such judgement the Group assesses the impact of any variable consideration in the contract, due to discounts or penalties, the existence of any significant financing component and any non-cash consideration in the contract. The transaction price of MRO contracts includes variable consideration arising from scope omissions agreed with the customer, liquidated ascertained damages for late hand-back and performance-related deductions. Variable consideration is estimated using the most likely amount method and is included in the transaction price only to the extent that it is highly probable that a significant reversal of revenue will not occur when the uncertainty is resolved. The carrying amounts of the related contract assets and trade receivables are disclosed in Notes 11 and 12. Impairment of property, plant and equipment and right-of-use (“ROU”) assets The Group assesses whether there is any indication that property, plant and equipment and ROU assets are impaired at the end of each reporting period. Impairment is measured by comparing the carrying amount of an asset with its recoverable amount. The recoverable amount is measured at the higher of the fair value less cost to sell for that asset and its value-in-use. The value-in-use is the net present value of the projected future cash flow derived from that asset discounted at an appropriate discount rate. Projected future cash flows are calculated based on historical, sector and industry trends, general market and economic conditions, changes in technology and other available information. Changes to any of these assumptions would affect the amount of impairment. Provision for expected credit loss of financial assets at amortised cost The Group and the Company review the recoverability of its receivables, including amounts due from subsidiaries, trade and other receivables at each reporting date to assess whether an impairment loss should be recognised. The impairment provisions for receivables are based on assumptions about risk of default and expected loss rates. The Group and the Company use judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s and the Company’s past history, existing market conditions at the end of each reporting period. The carrying amounts at the reporting date for receivables are disclosed in Notes 12, 13, and 14 respectively. NOTES TO THE FINANCIAL STATEMENTS DESTINI BERHAD 148 ANNUAL REPORT 2026
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